The Solution For Solid Energy
The government could solve Solid Energy’s debt problem with the stroke of a pen, and secure the jobs of its 700 staff,
says Democrats for Social Credit Deputy Leader, and finance spokesman, Chris Leitch.
The Government has repeatedly said the company is in the hands of the banks, but that’s simply a cop out.
The government is sitting on its hands hoping everyone else will take the blame when the company is finally put into
receivership.
There was a simple option that wouldn’t involve any taxpayer’s money, but clearly the government would rather see the
workers out of a job and taxpayers having to front up with 700 more dole payments every week instead, Mr Leitch said.
The $300 million was not money from depositors of the banks, but had been created out of thin air when the banks
advanced the loans.
The Bank of England, New Zealand’s Reserve Bank, and the International Monetary Fund all confirm that this is the case.
They also confirm that the Reserve Bank could use the same mechanism to replace the Solid Energy debt at no cost to the
Bank, or taxpayers.
This new Reserve Bank loan to Solid Energy could be at no interest, and repayable over an extended period of 30 years or
more with no repayments for a five year period.
Solid Energy would save $23 million per year in interest payments, enough to start it back on the road to viability.
This is an entirely elegant solution and a win-win for all parties involved.
Solid Energy would recover its viability, the banks would get their money back, workers would keep their jobs, money
would continue to flow into businesses and communities in the Waikato and West Coast, taxpayers would be saved bail-out
costs or additional dole payments, and the government would get the credit.
This solution is so good that the only reason the government would not opt for this scheme is if it wanted Solid Energy
to go into receivership.
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